Common Lines used in Real Estate

I have found these comments to be pretty much used by agents across the country. The sole intent is to gain your confidence and convince you that only THEY have the best deals.

1. Sign this Power of Attorney and I’ll take acre of you...   Do you leave your house unlocked or write the PIN number on the back of your ATM card? No! Then why would leave an agent in charge of deciding how to spend your money? If you are going to be out of the country then hire someone who has YOUR interests in mind to look after your business deal. Hint:  This person probably is not your real estate agent!
2. Let me tell you how honest I am. If someone has to tell you that they are honest, that should raise a huge red flag about them.  Reputations are earned, not told.
3. I take my fiduciary responsibility seriously. This is just another way of trying to tell you that they think they are honest.  Again, honest people don’t have to go around telling others how honest they are.
4. All Ticos are out to screw you! I have found that some are and others are not out to take advantage of you financially. After living here for more than two years, personally I am more leery of Gringos trying to sell me something than the Ticos. This is because I know what the Tico wants but do not know the Gringo’s true agenda.  Anyone who uses such generalizations should be included in the group that they are criticizing.
5. Gringos are more honest than Ticos. It is really easy to fall into this “comfort trap” and believe that all Gringos are honest.  The simple fact is that it is easier for a Gringo to sell property or an investment to another Gringo.  Think about it - Why are practically all of the time share resorts are staffed with Gringo sales people?
6. “We don’t mark our listings like other agencies...” Some agents state that they do not mark up properties above the seller’s asking price. Don’t believe them without proof.  In general, agents do mark up property and they use their attorney to cover their tracks.
7. We use Tico scouts to find property. SO WHAT! Everyone in the real estate industry has to use Tico scouts. If they don’t then they are only representing their development.
8. You or your attorney cannot talk directly to the seller. The common excuse often given is that the agent is afraid your attorney is unscrupulous and may steal the property or something like that. If you and/or your attorney cannot talk directly to the seller then there is a very good chance that they are trying to hide something such as a markup, they are the owners or they are taking a commission on both sides of the deal.
9. We charge a commission to the buyer because Costa Rican’s don’t pay commissions. Costa Ricans are not dumb and they know that to sell the property, they have to pay someone to find a buyer.  It is likely you are paying a hidden commission to find the property plus a “Buyer’s” commission to buy the property.  What is the total commission?  Who knows for sure but my estimate is about 10% - 12%.
10. “We have already done all of the due diligence for you.” When problem arises the water or electricity or the neighbors, the agent is not going to pay to fix it, rather you will hear something like “Gee I’m awfully sorry, I didn’t know about that.”   I received a similar apology after I discovered that the property they sold me did not have water available like he had stated.
11. The “Agent” states that they are making a full and truthful disclosure to you. One agent frequently uses the the same story about costs of utilities for every lot they show to their clients. They claim they can install utilities for the amounts that they quote. Maybe so, maybe not.  Just make sure you verify everything with the proper authorities and get real estimates from the people that will be doing the work.
12. You have to pay all of the closing costs. The custom in Costa Rica, as I understand it, is to split the closing costs equally between the seller and the buyer, including attorneys fees.  Of course you and the seller can agree on other terms but don’t start off by offering to pay for everything - that just makes the job easier for the agent.
13. Your earnest money deposit is not refundable. Some agents don’t use contracts that state that deposits are refundable; therefore, the seller receives the deposit immediately!  You can and should write a purchase option where your deposit is held in escrow at a bank and is refundable if certain conditions are not met. I strongly advise that you think long and hard about a deal if the agent says you have to make a nonrefundable deposit.
14. The seller can change his mind any time he wants and refuse to sell. Again, some agents do not know how to or do not want to write a correct contract.  If you have a purchase option and have it recorded, it will be much more difficult for the seller to back out.
15. You don’t need to use your own attorney. Just read our personal experience with attorneys and you will see why it is imperative that your attorney represent you and only you.
16. You don’t need a new plano. Your plano is a legal survey of the property.  Unless you get a new plano you will not know for certain that what you are looking at is really what you are buying.  It is a fact that some fences are occasionally moved by the neighbors and a lot of older surveys are flawed.
17. The water is safe to drink. Over 90% of the surface water in Costa Rica is polluted with gray water runoff, industrial pollution, farm run-off and human waste. Even the large municipalidades like Heredia and parts of San Jose have problems with human waste and petroleum getting into their wells. If you don’t know where the water is coming from get it tested.
18. No, the lot isn’t too steep... If the property is steep you have two options: Build on piers which is more costly or: Cut out a building pad.  Either way make sure you allow for adequate drainage.  Look at this disaster waiting to happen!
19. Avoid steep lots on hillsides. I have seen some lots carved out of a hillside where there is bare earth for forty to fifty feet almost straight up.  Landslides are common in Costa Rica, even though it is practically all volcanic soil.  Don’t think your lot is an exception unless you obtain an engineer’s opinion.  When in doubt ask an engineer, not your agent.
20. Ticos are not litigious like people from the US. This is an out right lie. There are so many suits pending in Costa Rica, some courts are backed up for up to 10 years.
21. “I am an expert on Costa Rica real estate.” Ask them how long they have been in the country selling real estate.  If they have not lived here full time for at least 10 years, then they, like me, are just starting their education.

Keep repeating to yourself - All they want is my money - I have to investigate everything.